As a regular writer & educator on different aspects of Investing, last week i received a call from my old client.

Being a lady, she had concern for her nephew, who was having business & was requiring immediate loan for business purposes.

The nephew had received a call from a reputed lending company & were insisting to buy traditional life insurance policy for getting the loan.

She asked for my help.

Friends, i regularly educate through various forums & blogs.

These revenue greedy companies go at any level for promoting their products. They are least bothered about client & his family as insurance is a contract signed by the client to pay premium for the complete term.

If any death occurs, the death claim or at maturity, the maturity amount is paid to the assignee i.e the lending company.

Analyse, you have taken a loan of 5 lakhs without any financial documents, you don’t have to pay EMI, just pay insurance premium of 60000/- every year for next 10 years.

At maturity after 15 years, the lending company, who is the holder of insurance policy will receive the maturity amount which will not be paid to you.

This is a viscous circle of mis-selling of life insurance policies.

Purpose of Insurance:-“Insurance is a means of protecting financial loss”

Small business owners, new businesses, vendors, housewife’s, salaried employees with additional business are soft targets of these companies.

My advise– Stay away from such offers, invest wisely.

PS: I have complete recording of the above mentioned sales call. If anyone needs to check it, pls comment.

The story goes that it was a particularly harrowing time in porcupine land. The winter was severe and the porcupines were finding survival difficult. They were freezing to death.

That’s when they held a meeting to decide on a course of action. As they got together to discuss their survival strategy, they discovered that just by being in close proximity with each other they were able to feel warmer and protect each other.

Being closeted together meant that their bodies generated heat which helped keep everybody warm. So they found they could survive the cold by just staying together!

But there was a problem.

As they moved closer, they found each other’s quills to be a bother—they poked and hurt.

Feeling the discomfort, some porcupines decided to avoid the pain from the quill pokes and moved away.

And as they ventured out on their own, the cold got them and they died.

Soon better sense prevailed and the porcupines realized it was better to stay together and survive rather than go out on their own and die.

Getting poked by the quills of porcupines that were close to them seemed like a small price to pay for survival.

This story has a great lesson for investors.

1) Investors afraid of market volatility redeem their investment because volatility seems to hurt them. Only if they could tolerate a little volatility their lives would be much better off in due course but their fear gets the better of them and they hurl themselves into a bigger crisis.

2) Another lesson investors can draw from this story is of leaving their Advisors and practicing self advisory or self medication whatever one may like to call it because the small fee that they have dispense seems to hurt them. They eventually venture out on their own and with no Advisor to manage their irrational and emotional behaviour, they too fall prey to greed and fear and lose their way.

Boris Becker had it all — six grand-slam tennis titles, models hanging off his arm and luxury houses all over the world.

At the height of his career, the German ace had amassed a reported $63 million in prize money and sponsorships, but now the man once known as “Boom Boom” for his ferocious serve has gone from boom boom to bust.

Now 49, Becker was declared bankrupt by a British court, capping a fall-from-grace story that saw the one-time wild child go from Wimbledon champ to walking headline by blowing through money, women and business ventures in retirement.

His lawyer pleaded for more time and “one more chance” to make good on debts he has racked up in retirement.

But the judge said, regretfully, the man she had once watched dominating center court has already had plenty of chances.

“One has the impression of a man with his head in the sand,” Registrar Christine Derrett said.

The above news of Boris Becker, Six times grand slam winner and one of the most successful tennis player, becoming bankrupt sends one of the most powerful message to all the youngsters of today.

“Success is never permanent . Plan well when the sun is shining coz failing to plan is planning to fail. “

Financial management is most crucial lesson one should learn in these uncertain times.

Today, every single product is positioned as need based solution. Can you deny the need to save for child’s education, self retirement, safeguard family’s health & build wealth in long term? It is difficult to see the advantages of any investment when approached by a good salesman.

The world has evolved to a global state & so do any company or salesman. I would rather term them all as HAWKERS. They position the product so well that customers fall for sales pitch & buy it.

Game plan of HAWKERS: IF you have child, you require Child Plan. If you have family, you must have medical insurance. You also need Retirement Plan.

Result: You buy costly child Ulips & guaranteed plans, complex medical policies, inflexible pension plans. They push you to diversify across Stocks, gold, property, bonds, bank FD, PPF & other complex options. If you can’t afford a new home, bigger car, or foreign holiday, they will get you to leverage on future income.

You take a home loan, a car loan, a personal loan & you also collect few credit cards in bargain. This is sure shot recipe for financial worries. Use the magic word to safeguard your finances against such perils, make you rich & protect you from friends offering free advice, wealth managers, money quacks, banks, insurance companies, bank relationship managers, insurance agents who are trying to sell you something or other.

Magic word: No, Nahi, Nako, Na, Venda, Nahim, Illa, Illai.

‘NO’ is a very powerful word. Use it ruthlessly. Say ‘NO’ to the relative who wants to sell you an endowment insurance policy. Turn down bank executive who is pushing a pension plan. Refuse the offer of free add-on card from Credit Card Company. Don’t agree to buy child plan that costs a bomb.

A company manufacturing dog food was having a brainstorming session with the entire team of Management, CEO, Sales Director, Marketing Director, Advertising Head on how to revive the falling sales of their product.

The usual blame game started with the Sales pointing finger at Marketing, and Marketing doing the same at Sales. Both together blaming the Advertising and vice-versa.

Suddenly the Assistant of the MD, got up, called a dog, placed the food at the dog. The dog sniffed at the food, and walked away without even touching it.

Well the reality was the end consumer was not willing to bite and there in lied the problem.

Similarly for the Developers and the Real Estate Sector, you can have tremendous debates, blame demonetisation or interest rates, RBI for poor sales of their home units.

The fact is the prices of the houses are beyond the reach of the end users and the end users are not willing to bite.